Mulberry bags a trading boost

Handbag company Mulberry, a favourite with Kate Moss, has been hit by the downturn as full-year profits slid £1m to £4.1m.

But shares rose 5% yesterday after the luxury goods firm, whose leather bags cost as much as £1,900, signalled an improvement in trading.

Underlying sales for the first ten weeks of its new financial year jumped 21% following the success of its new Mitzy range and increased demand from tourists.

Full-year sales increased from £51.2m to £58.6m, while the stock rose 3p to 65p yesterday. And they rose again today, hitting 70p. Before the financial crisis, in the summer of 2007, the shares traded as high as 282p.

Chairman Godfrey Davis said: 'We made a very positive start to the financial year. However we remain cautious due to the uncertain economic climate.'